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Unlike OpenAI or SpaceX, a lot of those tech companies are raking in the money. meta, google, amazon, apple all have huge cash flows. They will be buffered by this money - in dot com time, the money wasn’t already there, just the eyeballs. And while Cisco, which like Nvidia sold actual things, took a long time to regain their stock price, they made money selling actual things all along. On the other hand, there is more debt now than in dot com. I wouldn’t be surprised by a fifty percent decline, but it will be different than dot com for sure.

by SlinkyOnStairs2 hours ago|

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> And while Cisco, which like Nvidia sold actual things, took a long time to regain their stock price, they made money selling actual things all along.

This is the key comparison. It's not the "Pets dot com" side of the DotCom bubble, but the Telecom Bubble that followed. (All the AI startups that just repackage someone else's inference will go the way of Pets dot com, but their economic impact is minimal)

Certainly, Big Tech has massive cashflows. But those cashflows were priced into the 2023 valuations.

That is what makes the current valuations so ominous. Just a correction back to 2023 would be enormous. And as you note, a lot of these companies are taking on debt, dumping huge investments into AI. They're worse off than they were in 2023. Oracle may straight up go bankrupt.

by baggachipz1 hours ago|

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The issue with nvidia is that they're "selling" most of their product to companies taking out debt to fund the purchases. The company explodes, nvidia's booked but not-yet-existing profits go poof. They're also giving most of these companies the money to buy their own products. Looks sweet on a balance sheet, doesn't represent reality in any sense.

> Oracle may straight up go bankrupt.

And nothing of value would be lost.

by irishcoffee3 hours ago|

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I wish I could upvote this more. This is the point. Everything is so incestuous now that the problem isn't 2% here or 3% there, it'll be a catastrophe of epic proportions.

I do not want things to go kaboom, the CAPE index seems to indicate that what I want isn't relevant.

by bwfan12335 minutes ago|

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> Everything is so incestuous now that the problem isn't 2% here or 3% there, it'll be a catastrophe of epic proportions

Google and Amazon fund Anthropic which returns the favor with cloud purchases at these hyperscalers. So, google and amazon show increased earnings (via anthropic share markup) and increased cloud revenues via anthropic purchase. SpaceX didnt want to be left behind, so, it signed a deal with Anthropic.

Meanwhile capex at hyperscalers, VCs, PE etc is funding the party. Capex is not a concern to anybody as it doesnt appear on either revenues or earnings at the hyperscalers.

Downstream is partying from all the spending (server makers, chips, disk etc).

Whats not to like ! this is a perpetual money machine. Lets partay !